What is Home Contents Insurance?
Home contents insurance, or personal property insurance, covers the cost of replacing belongings in your home that are damaged or stolen. In the US, home contents coverage is usually included as part of a homeowners or renters insurance policy.
Who and what does home contents insurance cover?
Home contents insurance provides coverage against damage or theft of property in your home.
This usually doesn't include property already insured under its own policy, such as a car. Also, most homeowners insurance policies cover the personal property of your guests and live-in employees, but not the property of long-term tenants who aren't related to you.
Below is a list of items covered by "standard" sample policies in the US. Because these aren't legally standardized, your policy's covered categories and limits may differ. Contents coverage can also depend on who owns the property and its location — more on this below.
Home contents insurance usually covers… | But often doesn't cover… |
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Your homeowners insurance policy probably covers many items that contents insurance doesn't. This includes carpeting, boilers and appliances such as washing machines. If you rent, your landlord's homeowners coverage should apply to these items. As always, confirm the details of your own policy.
Does contents insurance depend on where you keep your things?
Most homeowners insurance policies offer at least some personal property coverage worldwide when you travel.
However, your coverage limit is often much lower for belongings that aren't in your home. For example, the Insurance Information Institute's industry-standard sample policy states that property "usually located" at a different residence is limited to 10% of the coverage for belongings in your insured home.
Fortunately, the same sample policy provides a consistent amount of coverage as long as your belongings are located on the premises of, but not inside, the insured home.
What are the coverage limits of home contents insurance?
Homeowners insurance tends to cover personal property at a value ranging from 50% to 70% of the insurance value of the structure.
When you buy renters insurance, you can choose a coverage limit. This allows you to pay for just enough to cover the total value of your possessions. However, your maximum coverage can be affected by two factors:
- How your policy calculates value
- Sublimits on specific types of property
Actual cash value vs. replacement cost value
Home contents insurance generally covers you for the actual cash value (ACV) of your belongings.
- Actual cash value: An item's ACV equals its original purchase price, minus any loss of value from wear and tear over time. Unless you lose something the same day you buy it, an ACV policy will always pay out less than what you spent.
- Replacement cost value: If you prefer to insure your belongings for their full original value, consider a more expensive replacement cost value (RCV) policy instead. With an RCV policy, you receive a payment reflecting the price you paid for the object — in other words, the cost of replacing it with a brand-new version. You'll need to decide whether the higher premiums of an RCV policy are worth the improved coverage.
Sublimits on valuable items
Most contents insurance policies also come with sublimits — sometimes called special limits — for especially valuable types of property, such as jewelry or fine art. When you file claims for such items, the policy will only compensate you up to the sublimit of the category. In addition, some sublimits also include a lower per-item limit. Below is a comparison of sublimits found in three sample homeowners policies.
Allstate | Farmers | State Farm | |
|---|---|---|---|
| Money and coins | $100 | $200 | $200 |
| Tickets, checks, deeds | $500 | $1,500 | $1,000 |
| Watercraft | $500 | $3,000 | $1,000 |
| Stolen jewelry and furs | $500 | $5,000 (max $1,000 per item) | Covered separately |
| Silverware and goldware | $500 (if stolen) | $3,000 | $2,500 |
| Trading cards | $1,000 (max $250 per card) | $2,500 (max $200 per card) | $2,500 |
| Stolen firearms | $1,000 | $3,000 | $2,500 |
| Digital equipment | $3,000 | $5,000 | $5,000 |
| Stolen rugs | $10,000 (max $2,500 per item) | $10,000 (max $5,000 per item) | $10,000 (max $5,000 per item) |
You may have noticed that some of the sublimits above apply specifically to stolen goods. This means the sublimit doesn't apply to property lost in some other event covered by your policy.
There are also instances where an insurance company's standard contents insurance policy won't cover certain objects at all, such as State Farm's sample policy on jewelry and furs. You may be able to add on coverage for specific items as needed, but it will raise your premiums.
How much coverage do you need?
The amount of coverage you need is determined by the total value of the possessions you want to cover.
Putting together an inventory of all of your belongings is the logical first step in getting the right policy. Most people underestimate how much their personal property is worth in total, but this makes sense, given that you're tallying up years' worth of purchases. There are two main ways to create an inventory:
- Write a list of your belongings (with serial numbers if you have them) using a pen and paper, and keep photos and receipts
- Use a mobile app to create a digital inventory and upload photos, receipts and serial numbers
How can you get home contents insurance?
If you're a homeowner in the US, you probably already have home contents insurance.
- House: Typical homeowners insurance policies cover the contents of your house and the structure itself.
- Condo: If you own a condo, your homeowners insurance policy may be "floor to ceiling," meaning it includes coverage for the interior and your movable goods.
If you're a renter, you likely need a renters insurance policy if you want your belongings insured. Unless you're related to your landlord, their homeowners policy contents coverage will not extend to your property in their home. Given that the average renters insurance quote in the US is only $187 annually, picking up a policy is usually a good idea.
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